By Andrew Starke
New chairman of the Australian Competition and Consumer Commission (ACCC), Rod Sims, has told the major supermarket chains they are ‘on notice’ and face close scrutiny to ensure they don’t misuse their market power.
In March this year both Woolworths and Coles denied media reports they were involved in a ‘beer war’ with the Foster’s Group after the beer supplier refused to deliver stock to several retailers.
Both played down speculation that beer would remain a touchstone in supplier discontent with supermarket chain discounting but this issue, amongst others, has clearly resonated with Sims.
“The two major supermarkets have significant market power, with many smaller suppliers feeling they lack a real ability to negotiate supply arrangements,” he told the Melbourne Press Club.
“The ACCC can and will watch closely to ensure any such dealings do not involve unconscionable conduct by the supermarkets.
“To give another example, supermarkets sell both branded and their own private label products.
“This vertical integration in the supply chain needs close scrutiny to ensure the supermarkets do not misuse their market power under Sector 46.”
Sims added that the ACCC would embrace the challenge to “keep the competition torch burning to see competition introduced into new areas”.
“Sound competition policy – when it is carefully thought out – provides benefits for consumers and for society overall,” he said.
“Under my chairmanship I intend that the ACCC will be a sometimes noisy proponent of this view.
“We are the major Federal Government agency with the word ‘Competition’ in our title. So I believe it is part of our job.”
